More than a year into the pandemic, COVID-19 has forced many independent businesses online for the first time to try to make up for dropping in-person revenue. And though the road to get there has been rocky, many small businesses say, the move to finally embracing e-commerce is opening up some new opportunities that will lead to lasting changes even after the pandemic ends.
“I don’t think this transformation was necessarily COVID caused,” said David Rusenko, the head of e-commerce at Square, a financial services firm that processes digital payments. “It was just COVID accelerated.”
The federal government announced in its April budget that it would create the Canadian Digital Adoption Program to ease the transition for small firms. The budget committed $4-billion to providing microgrants to businesses and to creating jobs for 28,000 young people to help up to 160,000 businesses go online.
Small Business Minister Mary Ng said the details and the timeline of the program are still being worked out, but will be available soon.
One of the models for the program is Ontario’s Digital Main Street, which was launched in 2016 by the City of Toronto and the Toronto Association of Business Improvement Areas. During the pandemic’s first wave of lockdowns in 2020, Digital Main Street received an injection of $57-million from the federal and provincial governments. Since then, the program says its SHOPhere initiative has helped 13,000 businesses across Ontario, half in retail, about a fifth in services and the rest in other industries.
Many have set up stores on Shopify Inc. , the Canadian tech company that recently reported processing US$37-billion worth of orders in the first quarter of 2021, up 114 per cent year over year.
In addition to being a platform for online stores, the company also extends loans through a program called Shopify Capital, which has extended more than $2-billion to businesses so far.
Ian Black, Shopify’s managing director for Canada, said the businesses that joined the platform in the past year have been more successful than those that started prior to the pandemic. That is, in part, because they were more likely to be experienced businesspeople who may have lost their jobs or saw entrepreneurship as their best path to putting food on the table.
“They were a cohort of people who were highly committed to succeed,” he said.
The Globe and Mail talked to companies that jumped into e-commerce for the first time during the pandemic about what worked and what they learned from their challenges.
The business: Etceteras Ladies Boutique in Saskatoon
The shift online: Joy Friesen, who has owned Etceteras since 1994, said she hadn’t even considered taking online orders for her retail storefront before the pandemic. “We don’t have a young clientele,” she said, adding that her customers wanted to be able to touch and try on items like handbags or shoes before buying. She finally took the plunge with the help of Local House, an online shopping mall for independent businesses in Saskatoon and Regina. Local House handles the delivery, and its $7 charge is split between Etceteras and the customer.
Lessons learned: Ms. Friesen said online sales have been better than expected, with about half coming from her existing base and half from new customers. She said she’s planning to keep e-commerce going after the pandemic is over, and may even branch out from Local House with her own digital store.
The business: Aqua Essence Swim Academy in Winnipeg
The shift online: When public pools closed in the spring of 2020, Aqua Essence had nowhere to hold its swimming classes. It pivoted to online courses, but could only do those that could be comfortably taken at home: babysitting courses for older children, and baby swimming classes in the bathtub. In-person swimming classes were conducted in the spring in hotel pools until public-health restrictions shut down those, too. Owner Rishona Hyman said business for the virtual classes has been booming, but overall revenue is still down more than 90 per cent because so much of the company’s offerings require in-person instruction. “Oh yeah, it’s rough. We need a pool,” she said.
Lessons learned: Ms. Hyman said she hired a marketing person to promote the online classes and the investment has paid off. She said her babysitting and babies-in-bathtubs courses are attracting students from outside Winnipeg, and even drawing in U.S. customers. “Just by moving that online, people can live anywhere and take those courses. It’s amazing, right?”
The business: Félix & Norton in Montreal
The shift online: Félix & Norton, which makes premium baked cookies and frozen cookie dough, saw most of its orders from bakeries, as well as a food truck business, dry up in the early days of the pandemic. Owner Michael Eskenazi said he moved quickly to get a Shopify store online by April, but they could only sell frozen dough that was delivered by a local company in the Montreal area. He later invested more than $60,000 to redo the site, a cost that included hiring a web design company, a professional photographer and paying for copywriting in both English and French. The business also began using FedEx for national deliveries, which are trickier than shipping just any product: Frozen dough has to be delivered before it melts, and freshly baked cookies delivered overnight so they don’t get stale. The cookie maker recently upgraded to a restaurant-grade kitchen so it could increase its output and act as a “ghost kitchen” through delivery services such as Uber Eats and Skip The Dishes.
Lessons learned: Mr. Eskenazi said online sales are growing quickly, and are close to what he used to make from sales to bakeries and through his food truck. He also believes the online presence could lead to higher in-person sales when customers see his products in grocery stores. “It’s increasing the visibility of our brand, and will affect people as they’re pushing their shopping carts through a Loblaws or a Metro, to go: ‘Oh yeah, I’ve seen these cookies before.’”
The business: Le Dolci in Toronto
The shift online: Lisa Sanguedolce, the owner of Le Dolci bakery in Toronto, had a website already, but it was mostly a way for customers to find her business. Patrons still had to call or visit in-person to shop. When the pandemic hit, she applied to Ontario’s Digital Main Street. Even with the help from an employee from the program, building her online store was a challenge: Le Dolci had a range of products, from baked goods to aprons, that needed different delivery options, and then there were the cooking classes that required a whole different kind of online setup. “Bless him, this poor guy was like, ‘Your [store] is a bit of a different beast,’” Ms. Sanguedolce said. “So he half-made it for just the cakes. But we were like, we can’t just half-make a website.” She said she ended up getting $5,000 in grants – half for the baking business, and the other half for the classroom – and spent another $10,000 beyond that to build Le Dolci’s digital presence, an investment that included hiring a professional photographer.
Lessons learned: Despite the bumps, Ms. Sanguedolce said she appreciated the help from Digital Main Street. “It was kind of a blessing because it pushed us to get it done,” she said.
The business: Eclection in Ottawa
The shift online: The store, which sells handmade accessories, joined Shopify through a three-month free trial offered in the spring of 2020. It received grants and support through Ontario’s Digital Main Street program. Khalia Scott, who owns the store with her mother, said it has required a tremendous amount of time to photograph, catalogue and add each of her one-of-a-kind items to the online store. “I’ve already exceeded the number of collections I’m supposed to have in the theme I chose with Shopify and I’m not even at 5 per cent of my inventory,” she said.
Lessons learned: So much of Eclection’s revenue was generated from foot traffic in its location in Ottawa’s tourist-heavy Byward Market, and creating that same experience online has been challenging. “We have a really high level of personal service that I’m trying to translate to the digital medium, but it’s a whole different thing,” Ms. Scott said. “We are bricks and mortar to the core.” She said online sales may not be high enough and she may abandon the Shopify store if in-person shopping returns to normal.
CHRIS HANNAY, INDEPENDENT BUSINESS REPORTER
SUSAN KRASHINSKY, ROBERTSONRETAILING REPORTER
The Globe and Mail, May 7, 2021